What’s going on guys Its Jordan de Jong here and today I want to talk about how to get the lowest price when negotiating on property, and even one better, trying to get a real estate agent to bid against themselves before putting in your next offer, we commonly hear real estate agents using these tactics, but why can’t we use them ourselves? Real estate agents do this for a living and the very experienced ones are highly skilled at what they do, they understand that our human emotions play a massive role when negotiating and they try to use them against us, however, they do have a property to sell and without it being sold, they don’t make any commission, so that’s our game plan, we are going to play with their emotions when trying to get the sale done.
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It’s so easy for us to be given a range, of say $480,000 to $520,000 and just presume we should start the negotiation at $480,000 and try to “Split the difference” and meet half way, but this is exactly what they agent wants you to do, and this is what they set a range instead of a price, they set a low anchor of $480,000 to try and get you excited and then a high anchor $520,000 to make you think it’s worth a lot more.
Of course, what they will say to you is “A property is worth what someone is willing to pay for it” and in a heated seller’s market this is somewhat true and even the top end of range can get blow out of the water when there are more than 3 very interested parties, this is why I try to avoid buying in a heated market at all costs and even though these techniques will work in majority of cases, sometimes, you can’t control other buyers emotions.
In a buyer’s market however, you are in control and this is why doing your due diligence is so important, start by looking at all the recent sales, compare similar ones, look for historical sales of the property and how much it has sold for before, see what is happening at other auctions and open homes and get an overall gauge for the current market.
This way we can fully educate our self on what we think is the true market value for the property and we can start here by setting our target price, for me personally this would be the absolute maximum I would pay for that specific property, so even if I have seen some market comparable that have come in lower, I would considering if I was happy to lose this property for an extra 10 Grand.
In the big scheme of things, If I was buying a property it would be under the impression that I was never going to sell it, so even 10 years of compounding capital growth would make and extra 10 grand look like a silly amount of money to lose out on the property for, Also, if your loving this content, make sure you smash that like button.
The percentage amounts to calculate our prices moving forward are taken out of the book, and Chris having the experience he does would know that these work in most scenarios, although as you’ll see, in my opinion the offers are very low, so you might have to accommodate to something more realistic, I’ll give examples of the actual numbers I would use.
The range given to us is $480,000-$520,000 I value the property at $470,000 based on my research and have given myself a $10,000 buffer, setting my target price at $480,000, which is the real estate agents lower anchor, meaning we have a bit of work on our hands…
Music: Jordan Astra | Rollers Rights
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